News Corp. Touts Paid Model for Hulu Again, But Where Are the Other Networks?

By Catharine Taylor

Updated on: September 9, 2009 / 11:31 PM
/ MoneyWatch

News Corp., the traditional media company that seems to be taking a paid online content model the most seriously, is once again talking up the possibility of bringing a paid model to video site Hulu -- a paid model as in consumers, not advertisers, would pay for some of the content on the site. This time, the News Corp. exec who brought the subject up was president/COO Chase Carey, not merely chief digital officer Jon Miller, who floated the idea several months ago just before meeting with other members of the joint venture, which include NBC Universal and Disney/ABC, for the first time. Carey addressed the subject today at a conference being put on by Bank of America-Merrill Lynch.

The weird thing is that, far as I can tell, NBC and Disney have said little on the subject, and if they have, they don't exactly sound enthused. A few weeks ago, Disney's CFO said these models are potentially good if they give consumers more content. But, as this Wall Street Journal story points out, the company has also been "noncommital" about ventures such as "TV Everywhere" which calls for consumers to get online cable content for free -- as long as they are cable subscribers. It quotes Disney CEO Bob Iger as saying that consumers might balk at paying for online content when so much of it is free. I've searched and searched, but I don't think that NBC has ever said anything about bringing a paid model to some of Hulu.

As News Corp. is the only Hulu partner putting a stake in the ground about introducing a paid model to part of Hulu, you have to wonder if this will ever come to pass. But whether or not NBCU and Disney play along, News Corp. is right. (Full disclosure: Carey grew up down the street from me.) As the newspaper business has already discovered, expecting advertising to pay all of the freight for online content doesn't work, and doing so will prove particularly perilous for cable, which depends on subscriptions for some of its revenue. The broadcast nets may see some ad revenue from Hulu, but it's not going to match the revenue they get from TV. The silence on the part of NBCU and Disney, which joined the venture only a few months ago, does make you wonder what News Corp.'s strategy is in terms of dealing with its partners. By talking about this in public, is it hoping to bring its partners around to its point of view?